PMJAY: The promises and challenges of a bold experiment

PMJAY: The promises and challenges of a bold experiment

News:

1. Ayushman Bharat—Pradhan Mantri Jan Arogya Yojana (PMJAY), a health insurance scheme announced in the last budget, will be launched on 23 September this year.

Important Facts:

2.  It is the most ambitious social health insurance (SHI) programme ever launched anywhere in the world.
3. The need for PMJAY was felt due to the following reasons:

• World Health Organization recommends at least 4% of its gross domestic product (GDP) to be spent on health.
• However, the Health Ministry’s National Health accounts show that total government health expenditure is only an appalling 1.1% of GDP.
• Thus, well over 70% of health expenditure is privately financed.
• More than 62% is, in fact, direct out of pocket (OOP) spending by patients as against the WHO-recommended OOP ceiling of 40%.
• Less than a quarter of India’s public health expenditure is allocated to preventive care which leads to high incidence of communicable diseases.
• Moreover, there is a rising incidence of non-communicable diseases with income growth, lifestyle changes and environmental degradation, resulting in a rising total burden of disease.
• Patients are faced with ill-equipped primary health centres (PHCs), run by poorly trained staff, a broken referral system and crowded hospitals.

4.  About PMJAY

• PMJAY will provide insurance up to Rs 5 lakh per family per year for in-patient secondary and tertiary treatment.
• It will cover over 100 million vulnerable families, which is about 500 million people, the poorest 40% of India’s population.
• Treatment would be provided by empaneled public and private hospitals
• A performance-linked payment system has also been designed to incentivise hospitals to improve service quality and patient safety.
• The hospitals would be reimbursed through the appointed insurance agencies or assurance societies/trusts or some combination of the two.
• A National Health Authority (NHA) has been mandated to roll out and coordinate the programme through the state governments.
• The states are responsible for empaneling the hospitals and also decide on the implementation mode whether insurance agency or assurance trust/society or a combination.
• PMJAY is actually the second tier of Ayushman Bharat, a two-tier scheme. It will ride on the first tier, a network of 150,000 health and wellness centres (HWCs) that will provide free universal and comprehensive primary health care.
• The HWCs will serve as the awareness, screening and referral link between patients and PMJAY.
• A cadre of frontline health service professionals called Pradhan Mantri Aarogya Mitras (PMAMs) are being trained to facilitate provision of treatment to beneficiaries at hospitals.
• An information technology platform has been developed by NHA consisting of a beneficiary identification system, hospital empanelment module and a transaction management system, along with robust security systems to ensure data privacy.

5. Challenges of PMJAY

• No actual database is available to provide actual financial cost of the programme.
• Without such a database, insurance agencies cannot estimate the required premium to adequately cover the pooled risk.
• When costs escalate, the coverage caps are introduced, thereby raising the burden of OOP spending. This is called coverage erosion.
• The private providers are pushing for high cost treatments which are not covered by SHI to enhance their profit margins.
• Implementation failure as  PMJAY will ride on the first tier of Ayushman Bharat, a network of HWCs which will be upgraded PHCs. Fixing this weak primary care foundation is more urgently needed than providing insurance for secondary and tertiary care.
• Moreover, there is missing protection for the middle class population since PMJAY will protect only the poorest 40%. This excludes the 500 million middle segment population who depend on the unorganized sector.
• PMJAY is an entitlement based scheme and people can’t register on their own. So those not on the SECC 2011 cannot get benefits of the scheme.
• Exclusion of the deserving people and lack of awareness among them is the major challenge of PMJAY.

6. Way forward

• The Thai model with excellent SHI coverage and OOP spending down to 18% is increasingly seen as global best practice.
• Not leaving patients to seek entitlement from Ayushman Mitras owing to lack of awareness, database supplied by the State Health Agency can be relied upon.